DayStar says new financing will aid in commercializing products

DayStar Technologies Inc. has completed a $15 million private placement of debt that could put as much as 30 percent of its stock in the hands of an unnamed institutional investor.

The Halfmoon, N.Y., company, which develops and manufactures solar cells, said the financing will be used to advance its previously-announced plan to move its products closer to commercialization.

"Achieving this financing milestone will provide for the rapid launch of our manufacturing expansion program, and enables us to progress towards meeting our near-term strategic objectives," said CEO John Tuttle.

The institutional investor purchased from DayStar a senior convertible debenture with an interest rate of 7.5 percent. The debenture is convertible into DayStar common stock (NASDAQ: DSTI) at $11.50 a share. The investor also received warrants to purchase DayStar stock at $12.65 a share beginning in six months.

The company will seek shareholder approval of the transaction within the next six months. It said that if shareholder approval is received, the amount of shares issued in connection with the deal will be "limited to 30 percent of the stock outstanding."

DayStar has about 6.5 million shares outstanding. The stock closed May 25 at $9.91 a share.